Companies Are Improving on Methane Disclosures, But Many Companies Are Still at Risk

Sometimes the best way to communicate with the public and win points on authenticity is to turn conventional wisdom on its head. Nixon, after all, visited China. Patagonia told consumers to repair, not simply buy, on Black Friday. Ray Anderson told the oil-intensive carpet industry that it was time to become sustainable.

And the oil and gas sector should begin owning up to its impact on methane emissions worldwide. The industry has scored many wins since President Trump took office, as in the Environmental Protection Agency's reversal of methane disclosure rules last year. Just before the new year, an industry group announced it had launched a voluntary carbon reduction program - but again, the emphasis was on voluntary.

According to a report from the Environmental Defense Fund (EDF), methane disclosure has improved overall, but across the entire industry reporting is uneven. Four major companies are now reporting quantitative methane targets; five of seven companies that have started this reporting have been targets of methane disclosure shareholder resolutions in recent years; and across the entire industry, 58 percent of energy companies report some measure of public information on their methane emissions.

Environmental groups, including EDF, have long urged companies to urge their methane disclosures, claiming that this potent greenhouse gas is responsible for at least one-quarter of the climate change trends the world is undergoing today. Even though carbon emissions dwarf methane emissions worldwide, methane is exponentially more potent - so improved efforts at capturing it and preventing it from entering the atmosphere could pay dividends in the long term (and of course, if its capture, it could be harnesses as an alternative fuel source, too).

But even if the energy company will continue to blanch at the thought of any regulation - including self-regulation - they should communicate to their stakeholders, and the general public, that they do care about the environment. Publicly, they could say one thing - that they care about our public lands, that they are aware about climate change, that they are moving forward. The timing is prescient: after all, it is no longer the oil companies that are spending the big bucks on K Street in Washington, D.C. The new big lobbyists are the technology firms such as Google and Facebook. And as those companies endure their public relations struggles with the fallout over privacy concerns and fake news, there is an opening for energy companies to improve their reputation and public perception.

EDF has pointed out within the board room, energy companies should be taking a second look at their methane disclosure processes because these gas leaks are often detrimental to their bottom line.

"Methane is a potent driver of climate change and a material risk for business. Companies that fail to report are going to be at a disadvantage with investors going forward," said Sean Wright, Senior Manager at EDF+Business.

What Wright means is that energy companies are literally letting money go up in thin air. EDF cites a study that concluded the sector loses approximately $30 billion globally annually from leaked or vented methane at oil and gas fields. Considering the shift in America's energy portfolio, that is no small change.

The message to energy companies is clear: methane disclosure can actually prompt these firms to become more efficient, shore up their ledger sheets, and prove that they are participants, not combatants, of climate change mitigation efforts worldwide.

Image credit: Daniel Foster/Flickr